Community Association Facts

These are the facts your realtor won't tell you about the quality of life and property in Community Associations, Homeowner Associations (HOAs), Property Owners Associations(POAs), and all community interest developments.

Monday, October 31, 2005

Real Estate Tips for New Home Buyers

The 10 Most Important Terms You Must Understand Before Forming or Buying Into a Community Interest Development

(Note: A Community Interest Development (CID) is any development controlled by a community association: HOAs, POAs, Condos etc.)

1. Amenities – are all the added benefits of living in a Common Interest Development: golf course, club house, community pool, conservation areas, and the list goes on . . . Just remember that with every added amenity and service, your fees will rise. Your fees will never be locked in with your purchase. If the POA/HOA decides to add a new amenity down the road, you will pay more. How will you budget for such an unknown factor?

2. Association Fees - Failure to pay your association fees will result in foreclosure. In many states, associations use non-judicial foreclosure. That means that you don’t even have the option of going to court before your home is taken. Luxury homes have been taken in a matter of weeks for only a few hundred dollars in back fees or fines. There is no law controlling how high your association fees and/or fines may rise every year. For every added amenity - for every added service - your fees will rise. What looks reasonable today may bankrupt you tomorrow.

3. CC& Rs – are Covenants, Conditions and Restrictions. This is the property owner’s bible. Know your CC&R’s by heart. According to, “The covenants, conditions and restrictions (CC&Rs) are the governing documents that dictate how the homeowners association operates and what rules the owners -- and their tenants and guests -- must obey. These legal documents might also be called the bylaws, the master deed, the houses rules or another name. These documents and rules are legally enforceable by the homeowners association, unless a specific provision conflicts with federal, state or local laws.”

4. Community Association Law – Attorneys who specialize in Community Association Law (a very lucrative legal specialty) represent community associations –not the individual homeowner. Your association fees pay for these CAL attorneys to be retained by your association just in case the association wants to foreclose on you. As a matter of fact, it’s almost impossible for homeowner’s to find any attorneys with expertise in community association law to represent them. Why? Because CAL attorneys have ongoing relationships with community associations but litigation for the individual homeowner is a one time thing. It’s all about money. If you find a CAL attorney willing to represent a homeowner, you’ve got to be wondering just how successful his practice really is. So the home owner’s best bet is to find an attorney with expertise in Corporate Law and in Open Meeting/Open Records issues.

5. Conservation Easements- are permanent deed restrictions that limit some types of intrusive development. Because it’s a lucrative sales tool, developers usually set aside a certain amount of common land for the owners’ exclusive use. It’s usually the least desirable land or land not suitable for homes. The developer makes a bundle in write-offs for doings this, but wasn’t it nice of your developer to set aside all that land just for you? All you have to do is help maintain it through your association fees and it will always there for your exclusive use. Or it will be there until the conservation easement is removed. Never buy into the “It will always be there” myth.

According to the Washington Post, “Landowners "donate" the easements to a nonprofit land trust or a government agency that, in effect, certifies that the restrictions are meaningful and provide some public benefit, such as preserving open space or protecting wildlife. That allows the donor to seek federal income tax deductions for the reduction in the land's market value. . . By taking such steps to limit construction, the owners of vacation resorts, country manors and dude ranches can seek big write-offs, too. . . Luxury-home builders in North Carolina paid $10 million for a tract in the mountains, developed a third of the land, then claimed a $20 million deduction . . .”

Oh by the way, . . . “Meanwhile, companies and individuals claiming huge write-offs face little risk of audit. . . . "It's complete smoke and mirrors," said John Echeverria, a former general counsel of the National Audubon Society. " Donations of conservation easements generally do not really give any value away."For details on how it works read the rest of this article, “Conservation Easements: Developers Find Payoff in Preservation,” at

6. Consumer Protection –If you already live in a community association and you have become disenchanted, were do you go? Well just do a search on the internet for consumer protection and community associations. Guess what you will find? More often than not, you will find a link to the CAI (Community Associations Institute). The CAI is the largest trade organization lobby promoting community associations. The CAI is not the homeowner's friend! Realtors, Management Firms, Mortgage Bankers, Insurance Companies, Attorneys, Builders, Developers, Landscapers, and many, many peripheral service companies belong to the CAI. Every one of these professions stands to make a lot of money offering their services to community associations. So do you imagine that you will get a true picture of community associations from them??? Not likely. Best bet – contact your legislators and demand legislation. Write letters to the Editor. Tell all of your friends what you have learned.

7. Foreclosure –is when your home and property is legally taken away from you. Foreclosure is always downplayed by mortgage bankers, realtors, and developers, but it happens all too frequently in community association developments. What happens when you’ve been cited by your POA/HOA with a violation and you disagree and fail to pay your fines? Forclosure. You could lose you home in a matter of weeks and more often than not, the POA/HOA doesn’t even have to take you to court.

8. Master Planned Development (Community) – A Gated Community that’s got even more amenities and services and is usually owned by a mega corporation that will never run out of money if you are taken to court.

9. HOA – is a Home Owners Association. Once the developer turns over the POA to the homeowners it will become a HOA. The existing CC&Rs are the governing documents. Homeowners will elect a board. The board usually consists of homeowners in your development. Often it’s the homeowners with the most land that get elected. The board exerts a tremendous amount of control over every aspect of your life. Once elected, it’s difficult to remove a board member. CC&R’s can be changed – but each association operates differently. Many states are starting to enact legislation to control the many abuses by POA/HOAs boards across the country. Unfortunately, the CAI (see Consumer Protection above) is fighting homeowner protection tooth and nail in every state!

10. POA – is a Property Owner’s Association. Actually, this is a misleading name. It should more accurately read “Developer’s Association”. When you buy into a new development, the developer and his hand-picked business associates will run the POA. After a certain percentage of properties are sold, the developer will usually turn over the association to the homeowners. But this often takes years and years. In many cases, the developer will maintain total control until all the properties are sold. Until then, it is best to remember that your developer is the King of your community. He may change your CC&R’s or raise your fees at will. Until then, you have absolutely no say or control over anything.

"Those who are willing to trade freedom for security deserve neither freedom nor security." – Benjamin Franklin

Saturday, October 29, 2005

You Must Read These Articles Before You Buy into or Form a Community Association!!!!

Why You Should Just Say “No” to HOAs
" . . .The fact is that HOAs are not there to control your neighbor’s behavior but yours. They do NOT protect and enhance your property values. That is just a myth. In some cases they depreciate your values because the commons are unkempt and the financials are a disaster, not to mention having to cover the costs of outlandishly expensive litigation that neighbors have no business entering into. The amenities they tout as allowing you to live the life of Riley are in fact a burden on private property, YOURS.
Full Article Source: Concerned Homeowners at

Buying a Home in the USA: The Big Secret
“ . . . You don’t know that HOAs are a form of government. If the agent were to mention that to you, you might ask about what kind of governments they are.”
Full Article Source: Concerned Homeowners at

Why are homeowners unhappy with their home owner association governance?
“Over the past year more and more Americans who are residents of homeowner and condo associations have become upset with their associations. Homeowners are fined for apparently arbitrary and capricious reasons; the boards of directors don't return phone calls from irate homeowners. The American flag cannot be flown unless approved by the HOA. New homebuyers are not being told that the state will not intercede in complaints nor accept complaints resulting in a lack of constitutional due process and equal protection under the law.”. . .
Full Article Source: Source: Citizens for Constitutional Local Government at

Are You Willing to Give Up Your Civil Rights to Live in an HOA?

Individual Rights & HOA contractual government
“What individual rights, as are recognized by the law and our government, exist in the HOA contractual government? None. Read your CC&Rs, which do not specify any rights except the right to the use of amenities under restrictive conditions. And, if you are behind in your monetary obligations to the HOA, like a common criminal in our society, the homeowner is disenfranchised and that right is lost. The HOA contractual government is a blot, a hugh stain, on the American system of government. . .”
Full Article Source: Citizens for Constitutional Local Government at

Comparison of Governments
“The HOA is, in effect, a private government placed above the laws of the land since its “citizen” members are denied their civil liberties and protection under the laws of their city, their state and the US government.” . . .
Full Article Source: Citizens for Constitutional Local Government at

HOA Secession from Local Government: The future of Planned Communities?
"In the future, more complete forms of private secession may become possible. For example, if neighborhood associations become more numerous, the political pressures for substantial rebates from property taxes - for relief from the current system of 'double taxation' - are bound to grow." . . .
Full Article Source: Citizens for Constitutional Local Government at

Planned Communities and a New Social Order in America
"Over the past forty years there has been an ever-increasing dispersion of a new social order in America. Its roots are founded in the spread of planned communities and its model of community governance that is an undemocratic, police state insistence on conformity to rules set through the façade of democratic institutions, much like those we are familiar with in regard to those "Peoples Republics" throughout the world. Each day, more and more children are living under and learning about this form a private government that does not respect the beliefs, rights and freedoms underlying the US Constitution or US Bill of Rights. . .”
Full Article Source: Citizens for Constitutional Local Government at

“In community associations, it falls ultimately to homeowners themselves to define and affirm the rights, protect them, and see that they are enforced. Other groups with interests that may diverge from those of unit owners, such as managing agents and professionals in the housing industry, are actively pursuing their particular interests in the operation of RCAs through their professional associations, through lobbying legislators, and through the courts.” . . .
Full Article Source: Concerned Homeowners at

Sample Full Disclosure Document for HOA Home Buyers
“CICP’s model marketing disclosures – information housing consumers should (but likely don’t) receive from builders or real estate agents or read in their ads and/or sales literature.” . . .
Full Article Source: Citizens for Constitutional Local Government at
Note: Click on the Disclosure Button at the bottom of the Home Page.

Community Associations and Binding Mandatory Arbitration

Learn more about how you will give up your civil rights in Communtiy Associations . . .

Mandatory Arbitration Clauses:
Undermining the Rights of Consumers, Employees, and Small Businesses
“Today most Americans are bound by at least one mandatory, pre-dispute arbitration clause. Buried in the fine print of a billing insert, employee handbook, health insurance plan, or dealership or franchise agreement, these clauses waive one’s right to access the courts, diverting cases to a costly private legal system that favors defendants. Arbitration clauses are achieving their intended purpose—undermining consumer protection, civil rights, and other laws that level the playing field between big businesses and individuals. The individual is left with no choice but to waive these rights, because arbitration clauses are presented on a take-it-or-leave-it basis. . .”
Home Mortgages:
Do not deal with home lenders who require BMA clauses!
One tip: Freddie Mac and Fannie Mae do not allow BMA clauses. Many credit unions also do not permit them.”
Full Article Source: Public Citizen at

CA Facts Tip: You may not be able to negotiate the BMA’s out of contracts when buying into HOA/POA and other community associations.

The Big Problem (More about BMAs)
“Binding Mandatory Arbitration Clauses (called BMA clauses) aren’t designed to help you or save you money—they are designed to hurt you.”
Full Article Source: GiveMeBackMyRights at